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Edited version of your written advice
Authorisation Number: 1013137203103
Ruling
Subject: Foreign investment vehicle as trust
Question 1
Will the Fund be considered a trust for Australian tax purposes?
Answer
Yes
This ruling applies for the following period:
1 July 2016 to 30 June 2017
The scheme commences on:
In the year ended 30 June 2017
Relevant facts and circumstances
As provided by the applicant. The Fund is a foreign collective investment vehicle that will hold units in a proposed Australian managed investment trust.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 275-20
Income Tax Assessment Act 1997 Section 960-100
Reasons for decision
'Trust' is not defined in the ITAA1936 or ITAA 1997. French J in Harmer and Ors v. Federal Commissioner of Taxation (1989) 20 ATR 1461; 89 ATC 5180 stated that a trust 'is notably a definition of a relationship by reference to obligations'. He went on to state that the four essential elements of a trust are:
1. the trustee who holds a legal or equitable interest in the trust property
2. the trust property which must be property capable of being held on trust and which includes a chose in action
3. one or more beneficiaries other than the trustee; and
4. a personal obligation on the trustee to deal with the trust property for the benefit of the beneficiaries, which obligation is also annexed to the property.
The Fund satisfies all 4 elements